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Forschungsinstitut zur Zukunft der ArbeitInstitute for the Study of Labor

Welfare Usage in the U.S.: Does ImmigrantBirthplace and Immigration Status Matter?

IZA DP No. 4659

December 2009

Ruth Uwaifo OyelereMaharouf Oyolola

Welfare Usage in the U.S.:

Does Immigrant Birthplace and Immigration Status Matter?

Ruth Uwaifo Oyelere Georgia Institute of Technology

and IZA

Maharouf Oyolola University of Vermont

Discussion Paper No. 4659 December 2009

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IZA Discussion Paper No. 4659 December 2009

ABSTRACT

Welfare Usage in the U.S.: Does Immigrant Birthplace and Immigration Status Matter?* The study of welfare participation in the U.S. prior to the 1996 welfare reform act and even afterward has focused on comparisons between native born and immigrant households. Analyses that have gone beyond this broad classification have focused on comparisons across race or with particular focus on particular groups like Hispanic immigrants. To the best of our knowledge, there is no study yet that tests for difference in welfare usage among immigrant groups and immigrant status. We do not expect welfare usage to differ among immigrant groups if we control for the factors that should predict welfare usage. Similarly, if immigration status does not prevent welfare usage for certain immigrants, then ceteris paribus, we do not expect welfare usage to differ among immigrant based on status. We investigate these possibilities by testing three related hypothesis using probability models. Our results suggest that birth place matters and the probability of welfare usage is not the same for all groups. We also find that for some birthplace groups, citizen and non-citizens differ with respect to welfare usage. Finally, we find that post welfare reform, the probability of being on welfare in comparison to U.S. born increased for all immigrant groups and these increases differed across groups. We provide possible explanations for our unexpected results. JEL Classification: J2, J24, J38, I21, O12, O15 Keywords: immigrants, welfare, welfare reform, immigrant status Corresponding author: Ruth Uwaifo Oyelere Georgia Institute of Technology School of Economics 221 Bobby Dodd Way Atlanta, GA 30332-0615 USA E-mail: ruth.uwaifo@econ.gatech.edu

* Cite only with authors’ permission. Please direct any inquiries to the above address.

1 Introduction

The issue of welfare usage among immigrants has gradually gained momentum in the last two

decades in the political debates in the United States after the abuses noticed in various welfare

programs- supposedly by immigrants. Although the hospitality and generosity of the United States

are laudable, welfare programs are extremely costly for the American taxpayers who have asked for

the overhaul of the welfare system after the revelations of many abuses within the programs. Some

economists went as far as saying that some of the states have become welfare magnets for welfare

seeking immigrants (Borjas, 1999). Such revelation and other evidence of welfare abuse led to the

passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PROWORA) in

1996, which restricts the eligibility of legal immigrants who arrived after August 1996 to the federally-

funded welfare programs for 5 years. According to Kaushal (2005), the legislation was strictly

motivated by two factors: first, that the generosity of the United States is attracting low-skilled

immigrants who later become a burden to the federal government. Second, immigrant dependence

on means-tested programs has drastically increased, thereby raising some budgetary concerns.

Coincidentally, the post-reform period is marked with the steady increase in the inflow of im-

migrants into the United States from various regions. Moreover, there were various developments

around the world that contributed to this surge. For instance, the 1990s saw an increase in the inflow

of immigrants from war-torn African and Eastern European countries. However, after the passage

of the welfare reform, the number of refugees gradually declined, according to the department of

Homeland security, the 85,706 refugees in 1999 to 48218 in 2007. On the other hands, while the

United States has tried to restrict the eligibility of immigrants into various federally-funded welfare

programs, the number of newly naturalized immigrants has increased. According the department

of Homeland Security, the number of naturalized immigrants increased from 837,418 in 1999 to

1,046,539 in 2008.

Although the existing literature has laid down the groundwork for future research, it has however

failed to address two critical questions: First, does the birthplace of the immigrant matter with

respect to their welfare participation? This problem is of great importance because when analyzing

the impact of immigrants on the labor markets and welfare, previous research have lumped together

the immigrants group. This paper helps solve this issue by disaggregating the dataset and examining

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the impact of immigrants birth place on the welfare participation. Second, does the immigrant status

really matter with respect to their welfare usage? In other words, we want to examine whether

naturalized immigrants have different welfare participation relative to noncitizen immigrants.

First, we show from a very simple model that if economic and demographic factors are the sole

drivers of welfare usage, then in a probability model controlling for these variables, if we divide the

sample based on place of birth, the probability of welfare usage should not differ across groups.

This leads to the first hypothesis we test that birth place should not matter for welfare usage. The

second hypothesis come from our expectation that the increase in restriction on welfare usage for

immigrants post 1996 should lead to a decrease in the probability of welfare usage for immigrants

in comparison to U.S. born. Hence we test the hypothesis that the probability of welfare usage

post democracy decreased for all immigrant groups and decreased equally among these groups. The

last hypothesis is based on an expectation of higher welfare usage for naturalized citizens versus

noncitizen immigrant because of the restriction on the latter group post welfare reform. Hence we

test the hypothesis that naturalized citizen because they lack legal restriction and hence reveal their

true preference for welfare usage, have a higher probability of using welfare than noncitizens.

We test these hypothesis using simple probit models and two different measures of welfare usage:

restricted and unrestricted. Controlling for economic and demographic factors that should predict

welfare usage, we estimate the probability of welfare usage for the different groups in comparison to

U.S. born. Our results leads to the rejection of all our hypotheses. First, although some immigrant

groups share similar probability of welfare usage, birthplace seems to matter for welfare usage.

Second we find that in comparison to U.S. born that the probability of using welfare increased

for immigrants post welfare reform and the level of increase differed across groups. We show that

this result is not driven solely by changes in immigrant population type over the last 10 years

and immigrants arriving pre reform also experienced an increase in probability of welfare usage in

comparison to their U.S. born counterpart. In addition, we also find that in contrast to what we

expect, naturalized immigrants on average use welfare less or equal to noncitizen immigrants.

The rest of the paper is organized as follows. In section two we review the literature and highlight

the welfare reform of 1996. In section three we highlight the data we will be using and present some

descriptive statistics. In Section four we discuss our theoretical and economic foundations and outline

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our proposition/ hypothesis and empirical strategy. In section 5 we present our results and provide

possible explanations for the results. In the last section we provide inferences and conclusions

2 Literature Review

The issue of immigration gained momentum in the 1990s after the passage of the Personal Re-

sponsibility and Work Opportunity Reconciliation Act (PROWORA) in 1996. Prior to the welfare

reform, the literature found evidence of welfare abuse by immigrants. Borjas, (1994) noted that

some “generous” states had become magnets for welfare-seeking immigrants. He also noted that

immigrants with high level of productivity tend to adapt more rapidly to the host nation labor

market conditions. However, the ones lacking the skills required by the host’s nation employers tend

to rely heavily on welfare programs to supplement their incomes. Borjas findings and the results

of other immigration specialists, in addition to a public perception of U.S. born Americans that

individuals were abusing the welfare system by not applying for jobs, having more children and

remaining unmarried to qualify for more welfare benefits, are some of the reason that led to the

passage of PROWORA.

Several studies have compared immigrant and natives welfare usage. Borjas and Trejo, (1991)

found evidence that immigrant use the welfare system more intensively than natives. Borjas (1996)

also finds the probability of receiving cash benefits differ for immigrant and natives though the

difference is small. This result slightly contrasts with the finding of Blau (1984) who found that

immigrants and native households have the same probability of participation into the welfare system.

The different results might be linked to the time periods considered as there is evidence that recent

immigrants tend to use welfare programs more. Also, the contrasting result again may highlight

the need for specific decomposition of the immigrant native gap in welfare use by types of welfare

programs. This issue was highlighted in Borjas (1996). He emphasized that although the immigrant-

native difference in the probability of receiving cash benefits is really small, if other non cash

programs are considered which a huge share of welfare programs is, the gap widens.

There are also several papers that show economic agents whether native or immigrants respond

to differences in welfare benefits across location and time. This response to differences in welfare

benefits across states has led to the classification of some states as “magnet states” for immigrants.

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Zavodny (1997) tests this magnet welfare state hypothesis noting that welfare payments are not

correlated with immigration levels; rather, the presence of earlier immigrants is the primary deter-

minant of the locational choices of new immigrants. However, the authors looked at all immigrants

together and it is possible that the effect might differ within the immigrant population given the

institutional and social factors that led to immigration. Her results are in contrast to Borjas (1999)

who provides evidence in support of the welfare magnet thesis. He finds that immigrant welfare

recipients are more heavily clustered in high-benefit states than the immigrants who do not receive

welfare, or than natives. The interesting question that ties into what we will be analyzing in this

paper is if the immigrants who are welfare recipient are randomly distributed among all ethnic

backgrounds or if there are place of origin effects. Huffman and Kilkenny (2003) result also supports

this view of labor responding to welfare programs. They investigate whether the welfare decline

and labor force participation increase in the U.S. can be attributed to state welfare parameters

and other opportunities. They compare welfare and labor force participation Midwestern families

who are eligible for Temporary Assistance for Needy Families (TANF) to the rest of the U.S. and

find evidence of differences in trends which could imply that individuals labor force participation is

responsive to welfare programs both for citizens and immigrants. As mentioned above, the United

States congress in response to the finding and allegations of welfare abuse of immigrants decided

to grab the bull by the horns by passing the welfare reform of 1996, which restricts the eligibility

of noncitizens immigrants. In response to the welfare reform, some states decided to supplement

the federally funded welfare programs by providing state-funded public assistance programs to legal

immigrants who have been affected by the new law. This some have concluded would have led to

a more pronounced magnet state effect and might explain the differences in the Borjas (1999) in

contrast to Zavodny (1997). The impact of the welfare reform on the welfare participation of legal

immigrants has been investigated by several authors. Borjas (2000) noted that since welfare reform

the use of welfare dropped among both natives and immigrants but with steeper decline among im-

migrants although immigrants still have higher participation rates. The gap in participation rates

in food stamp programs he found to be attributed to differences in socioeconomic characteristics

between the two groups, particularly educational attainment. He also found a strong link between

use of cash benefit in the immigrant generation and the use of food stamps in the second generation.

5

Borjas (2002) investigates the impact of the welfare reform on the healthcare coverage of immigrants.

He finds that despite the restrictions provided by the reform, the immigrant population did not see

the substantial reduction in its health care coverage. He attributed this finding to the increase in

the labor supply by the immigrants after the passage of the reform, thereby raising the probability

of being covered by employer-sponsored health insurance. Furthermore, Borjas (2002) examines the

impact of the welfare reform on the welfare use in immigrant household. He finds that the welfare

participation rate of immigrants decline relative to the natives at the national level. He attributed

this drop to the decline in the welfare participation of immigrants in the state of California, which

host one of the largest immigrant groups. Other research projects on the impact of the welfare

reform on immigration have focused primarily on the impact of the legislation on the labor market

outcomes of the latter (Lofstrom and Bean, 2002).

Although the existing literature has investigated the impact of welfare on immigrants before

and after the reform, it has however failed to examine whether there is an ethnic difference in the

welfare participation of immigrants. However, some recent papers on immigration in developed

nations signal the need for a more decomposed analysis of immigrants. Lofstrom and Hansen(2003)

provide evidence that the higher welfare utilization of immigrants in comparison to natives is not

solely an American phenomena, using a large panel data of Sweden. More importantly, they find that

differences among immigrants exist. They find that refugee immigrant display substantially higher

public assistance participation rates upon arrival in Sweden compared to non-refugee immigrants,

but they assimilate out-of welfare at a faster rate than non-refugee immigrants. Ekhaugen (2005) also

finds differences among immigrants to Norway with respect to welfare usage overtime. She finds that

non-western immigrants to Norway rely heavily on welfare transfers and this continues for several

years after immigration. Interesting and unexpectedly, she finds some evidence of assimilating out

of welfare for refugee while other non-western immigrants assimilate rapidly into welfare. The

need for more specific decomposition of welfare program usage among immigrants and native born

can also be inferred from some of the results of Borjas (1996). He highlighted ethnic networks as

a potential channel for transmission of the knowledge of the available welfare programs between

newly arrived and earlier immigrants. Hence, if economic and education status of early migrants

differs among immigrant groups, then even if new migrants from the same immigrant group are

6

poor and more likely to use welfare they will have less information than another poor immigrant

groups whose early migrants used the welfare programs intensively. These differences in information

can lead to differences in welfare usage among different immigrant groups. For example if early

African migrants to the US were highly educated and less likely to use welfare then there might

be a lower probability that the new African immigrants might use the welfare programs even if

they came in as refugees or via the visa lottery . The exact opposite might also be true if early

immigrant from another country or ethnicity tend to be poor and uneducated and needed to use

the welfare programs much more. Finally, there is not as much in the U.S. on exit from welfare

usage or assimilation out of welfare programs. Lofstrom and Hansen(2006) is one paper that focuses

on this question in the case of Sweden. They try to explain the role of entry and exit rates on

immigrant-native differences in welfare participation. However Ekhaugen (2005) and Lofstrom and

Hansen(2003) results might suggest that there are group differences among immigrants with respect

to exit out of welfare programs. Both papers find that refugees exit faster from welfare programs

than other immigrant group. Our paper attempts to fill the void in analysis of the U.S. experience

by examining if there are ethnic differences in welfare participation and if response rates differed

across different groups post the 1996 welfare reform. In addition, we examine the role of immigration

status on welfare usage.

2.1 Overview of the 1996 Welfare Reform

In light of the abuses noticed in the different welfare programs, congress passed the Personal Re-

sponsibility and Work Opportunity reconciliation Act (PRWORA) in August 1996. The PRWORA

excludes legal noncitizens that arrived after August 1996 from various federally-funded welfare pro-

grams. Thus immigrants who arrived after the aforementioned period were not eligible for means-

tested programs such as foodstamps, Supplemental Security Income (SSI), for at least 5 years.

Strong opposition from immigrant advocates led the federal government to restore food stamps and

Supplemental Security Income (SSI) for the children, disabled and elderly (Kaushal, 2005). It is

important to mention that in response to the restrictions of the eligibility of immigrants to the

welfare programs, the federal government gave the different states the options of extending bene-

fits to legal noncitizens that have been affected by the new law and some states did. Some states

have used state-funds to either supplement or restore safety-net programs for their most vulnerable

7

immigrants. Thus states such as California, New York and Texas that host large immigrant popu-

lations have extended eligibility to newly-arrived immigrant groups. According to Kaushal (2005),

“10 states have created food stamps programs, 15 have substitute Medicaid, 3 have substitute SSI,

and 19 have provided funds for the welfare needs of newly arrived immigrants. Of the six traditional

immigrant states where three-fourths of all immigrants live, only California provides newly arrived

immigrant families access to all four programs. In Illinois and New York, newly arrived immigrants

get Medicaid but no other benefits. In Texas, Florida, and New Jersey, newly arrived immigrants

get none of these benefits.” Moreover, immigrants themselves have also increased their labor force

to mitigate the effect of the reform on the healthcare (Borjas, 2003).

Prior to the 1996 reform, with the exception of refugees, all immigrants were entitled to AFDC

and SSI three years after their arrival (Hao and Kawano,2001). However, due to the numerous

abused of the various programs noticed, congress passed the law despite the outcry from the various

immigrants advocates. The welfare reform placed explicit restrictions on the eligibility of nonciti-

zens to receive the temporary Assistance for Needy families (TANF)1, food stamps, Medicaid, SSI

and other health and social service programs (Lofstrom and Bean, 2002). This law particularly

targeted legal immigrants who entered the country after August 22, 1996. The need to restrict the

access of legal immigrants to the welfare system stems from the debates that immigrants were using

extensively welfare programs and that the United States was attracting low-skilled immigrants who

later on become a liability to the host country. Another reason for the passage of the law is the

general perception that some immigrants make their immigration to the United States on the basis

of the generosity of the welfare programs, which is known in the literature as the “welfare magnet”

hypothesis. According to Kaushal (2005), this legislation was strictly motivated by two factors: first,

there was a general perception that immigrants were abusing the welfare system. Second, there was

fear that the US welfare system was attracting low-skilled immigrants who are likely to become a

liability to the system.

3 Data

The data used in this paper come from the Current Population Survey (CPS). The CPS is a monthly

survey sponsored by the Census Bureau and the Bureau of Labor Statistics (BLS) that provides

8

information about individual persons and households. In this study we specifically make use of the

data from the 1994-2008 CPS March supplements. The questions center on demographic character-

istics, income and other economic variables as well as labor market activities. It also includes other

annual supplementary information like health insurance. We derive multi-stage stratified samples

of the CPS from IPUMS. We select the period of 1994-2008 for our analysis because the question

on immigrants birth place continent was only introduced in 1994 and fully defined from 1995. The

break down of birth place continent was limited in the 1994, for example, we cannot differentiate

immigrants from Africa from immigrants from most parts of Asia. Given our main focus is in dif-

ferences in birth place continent in welfare usage, this means we only have one years before the

welfare reform in our dataset and 12 years post the reform. Also controlling for health is important

in predicting welfare usage and this variable is only available from 1996 in the CPS. Hence we will

focus on the 1996-2008 data for most of our estimations to adequately control for this factor. For

the hypothesis for which we are interested in comparing pre and post reform welfare usage, we will

eliminate this control and compare pre and post reform estimates without controlling for health

status.

One of the advantages of using the CPS via IPUMS is that it makes cross-time comparisons using

the March CPS data more feasible as variables in IPUMS-CPS are coded identically or “harmonized”

for 1962 to 2008. The CPS data can be used to create a two-year panel by matching the Outgoing

Rotation Group (ORGs) between consecutive survey years. The ORG component is made possible

because the CPS uses a 4-8-4 sampling scheme. This means that each household is in the survey

for four consecutive months, out for the next eight, and then returns for the following four months.

We however do not make use of this property because of problems faced with trying to match

observations over the two consecutive years in IPUMS.

3.1 Descriptive Statistics

As stated above, the objective of this study is to examine whether the birthplace and educational

background of immigrants matter with respect to the welfare usage. Table 1 provides the summary

statistics of various welfare forms across natives and immigrant groups. Specifically, we present

the welfare usage of food-stamp, heat subsidy, public housing, welfare income and any form of

welfare. With respect to food-stamp, our table shows that other North American immigrants have

9

Table 1: Welfare Usage by Birth Place

Africa C.A.C Asia Europe South Oceania Natives Other NorthAmerica Born America

(1) (2) (3) (4) (5) (6) (7) (8) (9)Food Mean 1.072 1.1 1.048 1.045 1.046 1.055 1.084 1.091 1.27stamp Stand. Dev. 0.25 0.3 0.21 0.2 1.011 0.22 0.27 0.28 0.44

N 7868 146666 68586 42441 20624 1599 2245738 9424 3827Heat Mean 1.017 1.018 1.012 1.018 0.53 1.009 1.03 1.029 1.09

Subsidy Stand. Dev. 0.12 0.13 0.11 0.13 0.54 0.096 0.17 0.16 0.29N 7868 146666 68586 42441 20624 1599 2245738 9424 3827

Public Mean 0.56 0.59 0.42 0.32 0.53 0.5 0.29 0.53 0.81Housing Stand. Dev. 0.58 0.55 0.53 0.5 0.54 0.57 0.51 0.57 0.72

N 7868 146666 68586 42441 20624 1599 2245738 9424 3827Welfare Mean 0.016 0.021 0.01 0.009 0.009 0.008 0.013 0.023 0.047Income Stand. Dev. 0.12 0.14 0.1 0.09 0.094 0.091 0.11 0.15 0.21

N 7137 134609 63590 38856 19046 1428 1649500 8570 23120Any form Mean 0.067 0.11 0.061 0.051 0.055 0.051 0.056 0.09 0.16of welfare Stand. Dev. 0.25 0.31 0.24 0.22 0.22 0.22 0.23 0.28 0.36

N 7868 146666 68586 42441 20624 1599 2245738 9424 25578

Note: Standard Dev. -Standard DeviationC.A.C- Central America and the Caribbeans

the highest food-stamp usage, followed by the Central American immigrants. Other North American

immigrants consist of immigrants from North American countries like Canada and Bermuda as well

as immigrants from U.S. protectorates like Puerto Rico. Later on in the empirical section of the

paper, we break down this group into two to highlight that the high welfare usage is peculiar to

solely those from the U.S. protectorate. Another salient element of the table is the fact that the

North American immigrants have on average the highest welfare usage in public housing. Overall,

table 1 indicates that the Other North American immigrants have on average the highest welfare

usage in food-stamp, public housing, welfare income and any form of welfare. This immigrant

group is followed by the Central American immigrants. Besides the welfare usage across immigrant

groups, we also present in Table 2 the welfare usage of immigrants by their educational attainment.

Educational attainment ranges from less than 8th grade to doctorate and professionals. With respect

to the educational attainment, the table shows that the North American immigrants have the highest

welfare usage from less than 8th grade up to the associate degree. This group is followed by African

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immigrants with a high school diploma or less. However, we notice that for levels of education

of a bachelor degree or higher, immigrants from Central America have the highest welfare usage

followed my immigrants from Europe. The surprising element of the table is the differences across

immigrant groups in the intensity of the welfare usage for each level of education. Interestingly,

the results in this table provide some support for the public perception that immigrants from the

third world countries have an intensive usage of the welfare programs especially at the lower levels

of education. As mentioned above, some of the abuses noticed within the system led to the passage

of the PRWORA in 1996. Table 3 summarizes welfare usage across immigration status. We divide

immigrants into those who are naturalized and does who are not. We call those who are not

naturalized citizens “non citizen immigrants”. This category consist of permanent residents, those

on visas and those who are illegal immigrants. Interestingly, Table 3 seems to suggest that non-

naturalized immigrants use welfare programs more intensively than the naturalized immigrants for

all immigrant groups apart from other North Americans (Canada and Bermuda). This result is

surprising giving the fact that many non-naturalized immigrants are not eligible for any welfare

programs because they are on visas or illegal. In addition, post 1996 even permanent residents

experienced added restrictions in access to welfare. A plausible explanation of this fact is that

the vast majority of the naturalized immigrants had already adjusted to the cultural and language

barriers and some other hurdles at the beginning of their “journey” on the host country’s soil. This

explanation validates the assimilation theory, which argues that immigrants tend to diminish the

language and cultural barriers over time by also improving their occupational skills (Kazemipur and

Halli, 2001). Another plausible reason may be the stigma attached to being part of the welfare

within the community might deter naturalized immigrants from taking part in welfare programs.

Unlike newly arrived immigrants who have to face more obstacles before adjusting to the host

nation’s lifestyle, the naturalized are well-established and may attach more importance to fitting in

as Americans.

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Table 2: Welfare Usage by Birth Place and Education Level

Education Africa C.A.C Asia Europe South Oceania Natives Other NorthLevel America Born America

(1) (2) (3) (4) (5) (6) (7) (8)<8th grade Mean 0.28 0.16 0.24 0.097 0.14 0.17 0.2 0.36

Stand. Dev. 0.45 0.36 0.42 0.29 0.35 0.38 0.4 0.48N 470 47363 5541 3944 1858 63 82467 3827

9-12th grade Mean 0.17 0.13 0.13 0.089 0.095 0.1 0.15 0.3Stand. Dev. 0.37 0.34 0.34 0.28 0.29 0.3 0.36 0.46

High N 608 28900 5357 3426 2443 162 245399 4202school Mean 0.073 0.088 0.068 0.058 0.053 0.067 0.074 0.13

Stand. Dev. 0.26 0.28 0.25 0.23 0.22 0.25 0.26 0.34N 2785 44010 21821 16678 8942 722 827877 9501

Associate Mean 0.038 0.072 0.042 0.043 0.035 0.033 0.042 0.073Stand. Dev. 0.19 0.25 0.2 0.2 0.18 0.18 0.2 0.26

N 519 4396 3809 2835 1183 120 126929 1444Bachelor Mean 0.029 0.054 0.022 0.036 0.027 0.004 0.014 0.027

Stand. Dev. 0.16 0.22 0.14 0.18 0.16 0.065 0.11 0.16N 1742 7235 16946 7001 3126 233 248420 2717

Masters Mean 0.016 0.033 0.01 0.028 0.016 0 0.008 0.02Stand. Dev. 0.12 0.18 0.1 0.16 0.12 0 0.09 0.14

N 596 1664 6482 3209 922 83 84296 859Doctoral & Mean 0.004 0.033 0.009 0.029 0.013 0 0.006 0.005professionals Stand. Dev. 0.069 0.18 0.09 0.16 0.11 0 0.08 0.07

N 417 1041 3634 1763 572 45 34112 570

Note: Standard Dev. -Standard DeviationC.A.C- Central America and the Caribbeans

4 Theoretical/Economic Foundations of Hypotheses

We assume that the probability a person i in country T uses welfare is a function of a set of variables

X.

Prob(W = 1) = F (X) (1)

X is a matrix of all the expected economic and noneconomic variables or factors impacting the

probability of welfare usage. Variables included in X are sex, age, marital status, employment status,

wages, location (state), immigrants cohort, year of immigration and health status. Government

assistance is usually associated with low levels of living and poverty. We capture the effect of

poverty by including the control variables wages and number of children, which both influence if an

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individual will be considered poor. If Y=1, an individual uses welfare, whereas Y=0 indicates that

an individual does not use any form of government welfare or assistance.

If country T consist of three types of people. Those born in T (BT), those who immigrate to T

and are now naturalized citizens (NT) and all other immigrants to T (IT). We assume that being an

immigrant does not necessitate welfare usage. Hence Prob(W=1) should be identical for comparable

immigrants and U.S. born citizens. Hence, ceteris paribus, Prob(W = 1)BT = Prob(W = 1)NT =

Prob(W = 1)IT . Meaning that if XBT = XNT = XIT for a group of individuals then such a group

of individuals no matter their citizen status will have similar probability of using welfare in country

T. If individuals in group NT and IT have home countries ranging from i=1......n. Then as long as

Xi,NT = X2,NT = ...........Xn,NT for a subset of individuals or Xi,IT = X2,IT = ...........Xn,iT , the

probability of being on welfare should not differ. Meaning Prob(W = 1)i,NT = Prob(W = 1)2,NT =

Prob(W = 1)3,NT = Prob(W = 1)1,IT = Prob(W = 1)2,IT .........P rob(W = 1)n,IT = Prob(W =

1)n,NT .

We can apply the above frameworks for country T to the U.S. If being an immigrant is not

casually linked with welfare usage and economic and demographic factors can fully explain welfare

usage, then in an econometric analysis, if we control for the X’s (demographic and economic factors),

the probability of using welfare should be the same for U.S. born citizens and immigrants. Similarly,

there should be no statistical difference in the probability of using welfare based on place of birth

or origin if we control for the X’s that predict welfare usage. This leads to the first hypothesis we

test. This hypothesis has two parts Hypothesis 1a: After controlling for factors that affecting

welfare usage, birthplace does not matter for welfare usage in the U.S. Hence, immigrants and U.S.

born have similar welfare usage. Hypothesis 1b: After controlling for factors that affecting welfare

usage, welfare usage is identical for all immigrant groups to the U.S.

Returning to our simple model framework of country T again, if post period t, restrictions are

placed on immigrants IT such that they are unable to use welfare until they become NT, then even

if XBT = XNT = XIT , for period t + 1, Prob(W = 1)BT = Prob(W = 1)NT > Prob(W = 1)IT .

Hence in period t + 1, the Prob(W = 1)IT < Prob(W = 1)IT in period t − 1. If we assume ∆=

Prob(W = 1)t+1

IT − Prob(W = 1)t−1

IT and if we assume that Xi,IT = X2,IT = ...........Xn,iT , then

∆i,IT = ∆2,IT = ∆3,IT .....∆n,IT . Meaning that if the X’s are identical across all i’s the change in

13

probability of welfare usage for group IT should decrease similarly no matter the birth continent post

the restriction in period t. Also, given that naturalized citizens are a select group and post reform

the issue of selectivity becomes more important. If individual i was using welfare before reform

and met the criteria for citizenship but never pursued it because of the fixed cost of application

or other personal reasons, post reform, individual L is likely going to apply for citizenship as long

as the total cost of applying for citizenship is less than the benefit gained from welfare support.

Hence post reform the probability of using welfare for naturalized immigrants should rise while

the probability of using welfare for noncitizens should decrease. As above, we expect this change in

behavior to be consistent across immigrant group. Hence for comparable naturalized individuals, the

Prob(W=1) should be the same, regardless of birthplace. Similarly, for comparable noncitizens, the

Prob(W=1) should be the same, regardless of birthplace. We can apply these simple expectation

to the U.S. and this leads to our second and third hypothesis. Hypothesis 2: Given welfare

reform led to an increase in restriction on welfare usage by immigrants who not citizens, then post

reform, the probability of using welfare should decrease for all immigrant groups in comparison to

U.S born, ceteris paribus. However among immigrants, welfare usage should decrease equally for

comparable individuals regardless of birth place continent. Our third hypothesis, which consists

of three parts is also based on the principles and expectations laid out above. Hypothesis 3a:

Ceteris paribus, Naturalized Americans regardless of their birthplace have a higher probability of

welfare usage than comparable Noncitizen immigrants. Hypothesis 3b:Ceteris paribus, the use of

welfare is similar for comparable noncitizens regardless of their birthplace. Hypothesis 3c: Ceteris

paribus, the probability of welfare usage is similar for comparable naturalized citizens regardless of

their birthplace.

Next, we further investigate what could lead to the rejection of the three above hypothesis. For

example, if Prob(W = 1)1,NT 6= Prob(W = 1)3,NT 6= Prob(W = 1)2,IT .... 6= Prob(W = 1)n,IT after

controlling for the X’s in a probit model estimation, then it means that citizenship status and or birth

place matters in predicting welfare usage. Similarly, such a finding could imply citizenship status or

birth place are proxing for other variables not included in X that we do not traditionally expect to

affect welfare usage. It is not impossible that citizenship status could matter in the U.S. because of

the restrictions on welfare usage for noncitizens. These restrictions increased significantly post 1996

14

when the massive welfare reform was implemented as described in section 2.1 above. Hence even

if individual i’s X is identical to individual k’s X, who is not a citizen, welfare usage would differ

because of the ineligibility of k. Hence the true preference of k is not revealed in the data and and

may create an artificial difference in the probability of welfare usage. Given the true preference is

revealed for all who are eligible for welfare, then we should not expect U.S. born citizens, U.S. citizens

from the protectorates and U.S. naturalized citizens who share similar X’s to differ in welfare usage.

If they still do, then it implies that type of citizen matters. Similarly if U.S. naturalized citizens

who share similar X’s differ in welfare usage based on continent of birth, then it means that birth

place matters. Birth place or citizenship type could matter if it is proxing for culture, information,

institutional experience or values of a group. These are variables that we will not typically include in

our X matrix and will not be not include in our regression analysis. We do not include such variables

because we do not traditionally expect values, past institutional experiences, access to information

or culture to play a role in welfare usage. However if our birthplace affects our culture, access to

information and values and a groups culture and value affect their preferences for assistance from the

government, then even if X1 = X2...... = XZ is the same for a subset of individuals from birthplaces

i....n, prob(W=1) will still differ across birth places for this subset of individuals, as long as culture

or values differ based on birth place. Similarly, if the institutions immigrants are exposed to before

they immigrate affect the way they view the government and the role of the government with respect

to getting assistance, then welfare usage may differ across immigrant groups from different parts of

the world again even though they share similar X’s. Also, if people select to becoming naturalized

citizens as a mark of their allegiance to a country and this come with a preference of giving back to

the country versus taking, then naturalized citizens might actually have lower probability of using

welfare than noncitizens. This is similar to the thesis that becoming a naturalized citizen may move

individuals into a class or group in the U.S. where perception of welfare usage is negative. In this

scenario, naturalized immigrants in a bid to fit into the group might stop using welfare. In addition,

if immigrants from different birth places, view becoming a citizen in the U.S. differently and this

view or perception affects welfare usage, then among naturalized citizens, the probability of using

welfare may differ across immigrant groups despite similar X’s for the individuals.

15

Empirical Strategy

Recall the focus of our analysis is to test three hypotheses that are expectations from our simple

framework highlighted above. Again we recap these hypothesis:

• Hypothesis 1a: Birthplace does not matter for welfare usage in the U.S. Hence, immigrants

and U.S. born have similar welfare usage. Hypothesis 1b:Welfare usage is identical among

immigrant groups to the U.S.

• Hypothesis 2: Given welfare reform led to an increase in restriction on welfare usage by

immigrants who not citizens, then post reform the probability of using welfare should decrease

for all immigrant groups in comparison to U.S. born, ceteris paribus. However among immi-

grants, welfare usage should decrease equally for comparable individuals regardless of birth

place continent.

• Hypothesis 3a Ceteris paribus, Naturalized Americans regardless of their birthplace have

a higher probability of welfare usage than comparable Noncitizen immigrants. Hypothesis

3bCeteris paribus, the use of welfare is similar for comparable noncitizens regardless of their

birthplaceHypothesis 3c: Ceteris paribus, the probability of welfare usage is similar for

naturalized citizens regardless of their birthplace

To test these hypotheses we rewrite equation 1 assuming a probit model as in equation 2.

Prob(Y = 1) = Φ(α0 + α1Ω + α2Z + α3W +∑

i

ψiRi) (2)

where Z is a matrix of all the possible factors impacting the probability of welfare usage. The

dependent variable Y is a binary indicator which takes on a value of 1 if an individual is on some form

of welfare and a value of 0 if the individual is not. Φ(.) in equation (2) indicates the standard normal

distribution. Variables included in the Ω matrix are predictors of welfare usage like education,

number of children in the family, size of the family, marital status, employment status and for

immigrants- years in the U.S. Z is a matrix of dummy variables including year and region dummies.

W represents wage which is an important predictor of welfare usage. R is the matrix of the variables

we are primarily interested in. The R matrix can have different dummy variables depending on

16

the model we are testing. In our main model, our R matrix consists of dummy variables based on

place of birth that divides the sample as follows: born in the U.S., born in U.S. protectorates, born

in other North America (not U.S.), born in Central American and the Caribbeans, born in South

America, born in Europe, born in Asia, born in Africa, born in Oceania and finally the group others.

The group others are those who did not choose or indicate a place of birth. Variable Y is measured

in two ways the restricted or standard welfare usage and the nonrestricted extended welfare usage.

For the restricted welfare usage, an individual gets Y=1 if the individual gets one or more of these

three welfare programs: food stamps, supplemental security income (SSI) or receiving any income

during the previous calendar year from various public assistance programs commonly referred to

as “welfare”. For the unrestricted measure of welfare or government assistance, an individual gets

Y=1 if any of the above three are received or if the individual gets government subsidized rent or

government subsidized heating.

We choose a probit modeling strategy as against a linear probability model though the lin-

ear probability specification of the binary choice model also provides ease of interpretation. This

is because in the linear model, unless restrictions are placed on estimates, coefficients can imply

probabilities outside the unit interval. We focus on the marginal effects from the probit model esti-

mation. These effects represent the marginal impact of an infinitesimal change in each independent

continuous variable on the probability of self-employment, providing the most straight forward inter-

pretation of estimated results from the probit models. For the dummy variables, the interpretations

are slightly different as the estimates capture the marginal effect of a change in the probability of

being self-employed for a particular group relative to the baseline group.

To test hypothesis 1 specifically, we estimate equation 2 and test for significant differences in

the estimates of the probability of being on welfare for the different groups in matrix R. We test

this hypothesis first assuming thee unrestricted measure of welfare and then the restricted measure

of welfare. We test hypothesis 1 in two ways. First, we compare the probability of welfare usage

of immigrant groups to U.S. born. In this analysis we are unable to control for length of stay in

the U.S. This is because this variable is nonapplicable for native born American and including 0 for

this group will distort the estimate. To try to control for the impact of wave of immigration, we

include a dummy for immigration cohort and make native born Americans the baseline group for

17

comparison. The use of immigrant cohort dummy is helpful but does not completely deal with the

problem of the impact of years in the U.S. on welfare usage given the role of information in welfare

usage, which is significantly correlated with length of stay. To deal with this problem, the second

way we test hypothesis 1 is to eliminate those who are U.S. born from the analysis and compare the

probability of welfare usage solely among immigrants. In this analysis, the probability of welfare

usage for other immigrant birthplace groups is compared to immigrants with a European birthplace.

In this analysis we can control for the years in the U.S., which is a one of the expected variables in

the X matrix.

To test hypothesis 2 we estimate the probability of using welfare for the different groups first

before reform (1995 survey) and after reform (1996-2007). We can only make use of one year

prereform because the question of place of birth was only fully implemented from the 1995 CPS

survey. Using these estimated probabilities, we compute the change in welfare usage for U.S. born

and compare it to change in welfare usage for each immigrant group.

To test the final hypotheses (3a-3c), we restrict our sample to only U.S. citizens first and estimate

the probability of welfare usage for all naturalized immigrant groups and citizens from protectorates

in comparison to U.S. born. Next, we eliminate naturalized Americans and limit the sample to U.S.

born and noncitizen immigrants and estimate the probability of welfare usage for noncitizen immi-

grants in comparison to U.S. born. We then compare the difference in welfare usage of naturalized

Americans to the welfare usage of noncitizen immigrants. Given this analysis does not allow us

to control for years in the U.S., again we redo this analysis excluding native born Americans and

compare welfare usage among naturalized immigrants groups and subsequently we compare welfare

usage for non citizen immigrants. In these latter two analysis, the base group for comparison are

immigrants from Europe.

5 Results

Table 4 captures the estimation of the probit model on the sample population using both measures

of welfare: the all inclusive measure and the restrictive measure. We present the marginal impact of

the probit estimation for ease of interpretation. We use these estimates to test the first hypothesis.

In column (1) and (3) we focus on the entire sample and the base group for comparison is U.S.

18

born. In contrast, in column (2) and (4) we focus solely on the immigrant population, including

immigrants from U.S. territories. In this estimation we control for years since immigration, which

may also impact the likelihood of welfare usage. At the bottom of Table 4 we highlight the estimates

of some of the variables we use as controls in the welfare usage probability model and also mention

other variables we control for including eduction and health. The results using both measures of

welfare are different but the conclusion in testing the hypothesis of interest is the same. The results

in Table 4 show that despite controls for what should typically predict welfare usage, welfare usage

is conspicuously higher for certain groups. Immigrants from U.S. protectorate like Puerto Rico,

Guam and U.S. virgin Islands have the highest probability of any group using any form of welfare.

With both measures of welfare we reject the hypothesis of similar welfare usage across groups

based on birth place continents. Although immigrants from South America, Canada (other North

America), Oceania and Europe use any form of welfare at the same rate as U.S. born, immigrants

from Asia, Africa, Central American and U.S. protectorates use welfare more1 The result in columns

(2) and (4) confirm this finding of differential welfare usage among birthplace continent using the

data restricted to solely immigrants. It also highlights the importance of including a control for

length of stay. Notice that the result using the unrestricted welfare measure suggests that among

immigrant groups, only immigrants from Europe and South America share identical probability of

welfare usage. Other immigrant groups have higher probability of welfare than Europeans apart

from immigrants from Canada who have the lowest probability of welfare usage among immigrant

groups.

It is worth noting that focusing on the restricted or standard welfare measure, provides slightly

different results for immigrants from Oceania and Europe. The result from column (3) suggests that

Oceania and Canadian immigrants are 1% less likely to use any standard welfare than individuals

who are U.S. born. They are the only groups with a lower probability of welfare usage than U.S.

born. In contrast, while Europeans immigrants are equally as likely to use any type of welfare as U.S.

born, they have a 0.6% higher probability of using standard welfare than U.S. born. In addition

they are more likely to use standard welfare than immigrants from Oceania, Canada and South

America. Also using this standard measures of welfare, the results from Table 1 shows that though

1Hence forth I will refer to other North America as Canada because the bulk of the immigrants that fall under thiscategory are from Canada. However this group includes those from Bermuda.

19

immigrants from Asia, Africa and North America are still more likely to be on welfare than U.S. born

individuals, the gap is much smaller than with the unrestricted welfare measure. Given the results in

Table 1, we reject the hypothesis that welfare usage is identical across immigrants and U.S. born and

also reject the related hypothesis 1b that welfare usage is identical for immigrant groups. Although

some immigrant groups have identical welfare usage rates as summarized in column (2) and (4),

the results suggest that some immigrant groups use welfare more. It is worth mentioning that the

probability of welfare usage for immigrants from U.S. protectorates is significantly higher than every

other group. Specifically, the probability of welfare usage for immigrants from U.S. protectorates is

9.9 percentage point higher than the next highest immigrant group (Africa) in terms of probability

of welfare usage.2

The results in Table 5 and Table 6 summarizes the result of several estimations that allows us test

our second main hypothesis. The results in Table 5 summarize our finding using the non restrictive

measure of welfare while the results in Table 6 highlights our finding using the standard or restricted

welfare usage measure. In both Table 5 and 6 columns (1) and (2), we focus on the whole sample

while in columns (4) and (5) the focus is solely on immigrants. columns (1) and (4) provide the

pre-reform estimates of the probability of welfare usage while columns (2) and (5) provides the after

reform estimate. Recall that with our second hypothesis, we predict that given welfare reform led

to an increase in restriction on welfare usage by immigrants who not citizens, then post reform the

probability of using welfare should decrease for all immigrant groups in comparison to U.S. born,

ceteris paribus. However among immigrants, welfare usage should decrease equally for comparable

individuals regardless of birth place continent.

The results in columns (1), (2) and (3) allows us to test the first part of this hypothesis using

the unrestricted welfare measures. From Table 5 it is clear that our hypothesis is rejected. All

immigrant groups increased probability of welfare usage in comparison to U.S. born post welfare

reform. Prior to the reform, all groups had a lower probability of being on welfare than U.S. born

with immigrants from Central America and the Caribbean having the lowest probability (a 10%

lower probability). The Post-reform saw drastic changes in the usage of the welfare. Immigrants

from Europe, Oceania, South America and Central American and the Caribbeans all have similar

2Africa only has a 4.1 percentage point higher probability of welfare usage than the base group Europe.

20

welfare usage probability as U.S. born while immigrants from Africa and Asia now have a higher

probability of being on welfare than U.S. born. Note that the estimates in Table 5 columns (2) and

(5) are similar to those in Table (4), columns (1) and (2). The only difference is that we do not

control for health status in the estimations of welfare usage in Table 5 and 6 because health status

is not available in the pre reform period data. Interestingly, the differences in this estimate though

not substantial suggests that health is a determinant of welfare usage. The estimates in columns (3)

is direct evidence leading to the rejection of hypothesis 2. The positive coefficient indicates welfare

usage increases versus decline. To test the related hypothesis that the change in welfare usage

should be similar across immigrant groups, we turn to the results in Table 5 column (6). Given the

change in welfare usage for other immigrant groups in comparison to European immigrants differ

statistically, we reject hypothesis 2b. Our results suggest that while immigrants from Africa and

Oceania have increased welfare usage probability more than those from Europe, immigrants from

Asia, South America, Canada and Central America have increased the probability of welfare usage

less than immigrants from Europe.

The results using the standard or restrictive measure of welfare in Table 6 confirm the results

in Table 5. Pre-reform, standard welfare usage for all immigrant groups was less than U.S. born

while post reform, the use of standard welfare increased for all immigrants groups with immigrants

from Africa, Asia, Europe all with higher probability of using a standard welfare program than U.S.

born. Comparing the change in welfare usage probabilities in column (3), Table 5 and 6 suggest

that immigrants increased welfare usage for all types of welfare. However, notice that the increase

in probability of standard welfare usage is smaller for all immigrant groups than the increase in the

unrestricted welfare usage probability. Also using the standard welfare measure, our results in Table

6 columns (4)- (6) confirms results in Table 5 that changes in welfare usage for immigrant groups

differed, with African immigrant groups experiencing the highest increase.

In terms of which immigrant group increased welfare usage the most or the least, we turn to

the results in column (6) in Table 5 and 6. Increases in welfare usage seems highest for immigrants

from Africa and lowest for immigrants from U.S. protectorates. We test these changes for significant

difference across groups and note that changes post reform was significantly different across groups

but not significantly different for all groups. For example, the change in U.S. protectorates in

21

probability of welfare usage was statistically different from the change in South America, Africa or

Oceania. These results are unexpected and could imply a number of issues which we highlight next.

5.1 Possible Reasons for Rejection of Hypothesis 2

The test of the first hypothesis led to the rejection of the thesis that welfare usage should not

differ across groups. This result suggests that welfare usage is not affected by solely economic

and standard demographic. This implies that culture, value, network information or institutions of

groups might have a significant role to play in individuals choice to use welfare. Culture, values,

network information and institutional background were not controlled for in our probability model

and may explain the differential welfare usage across group despite controlling for the standard

economic and demographic variables that should predict welfare usage.

In contrast to the first hypothesis where our results may be explained by not including some social

controls, the rejection of the second hypothesis is more unexpected. The theoretical expectation and

prediction given an increase in restriction on welfare usage should be decreased usage. However with

both measures of welfare usage, we see an increase in probability of welfare usage for all groups in

comparison to the U.S. and differential increases across immigrant groups. One possible reason for

this reverse result is the change in the population of immigrants over time. Post 1994, the sample

of immigrants to the U.S. has changed significantly both in country of origin distribution and types

of individuals (high skill, medium skill, low skill). Before 1990 most immigrants to the U.S. came in

based on either based on family reunification, marriage and schooling. However, in the early 90s the

U.S. government implemented the diversity visa lottery. The inception of the diversity visa lottery

(D.V lottery) in 1995 provided another avenue through which families from most countries in the

world meeting some criteria could immigrate to the U.S. as permanent residents. From 1995 when

the first 40,301 gained entrance into the U.S. through this means, every year 55,000 more people

from selected countries all over the world are issued this immigration visa. This types of people may

share different values, perceptions and view than early immigrants and hence may act differently

with respect to welfare usage, all other things being equal. Also post 1990 the number of immigrants

moving to the U.S. based on refugee and asylum increased. This increase was precipitated by an

increase in wars and civil conflicts in different parts of the world especially in Africa. Again though

we control for income, the perception, attitude or view of these select groups of individuals given

22

there experiences could be different and this may explain our surprising result. Also, given the

visa lottery changed the distribution of immigrants across countries from each continent, then it

makes sense that the average perception or values coming from each continent could changed over

time. In addition, though we control for education, education acquired outside the U.S. especially

in LDCs is not as good a predictor of income in the U.S. as education acquired in the U.S. This

again may partly explain the increases likelihood of welfare usage despite this control. However

the increase in probability of usage for immigrants from developed countries also, for which the

transferability of education is less tenable, suggests that education transferability cannot be the

only explanation for this reverse result. It is important to note that this finding is not implying that

usage of welfare has increased or the proportion of people on welfare have increased for immigrants.

Specifically, figure 1 shows that the proportion of people on welfare has fallen over time post reform

for immigrants more than for citizens and the proportion of immigrants on welfare is slightly less

than the proportion of U.S. born on welfare presently. This figure suggests that the reform did

reduce immigrants welfare usage share as expected. However, our result shows that this policy did

not reduce but rather increased the probability of welfare usage for immigrants who still qualified

to get government assistant. In addition, our findings suggest that for comparable individuals, the

choice of welfare seems to have changed for immigrants. Prior to reform, immigrants were less likely

than U.S. born to use welfare and now post reform, immigrants are more likely to use welfare.

However this result could be driven by the changes in immigrant types overtime.

To check if the change in the immigration population is driving the unexpected results of increase

in probability of welfare usage post reform, we redo the post reform analysis restricting the sample

of immigrants to those who were already in the U.S. by 1995. Results for this robustness analysis

are summarized in Table 7. Although the estimates change, our inference and conclusions using this

restricted sample of immigrants is still the same. Meaning we still reject hypothesis 2. However it

is important to highlight some differences in the results. Though the probability of using welfare

in comparison to U.S. born increased for all immigrant groups, the increase is less pronounced for

most immigrant groups than the earlier regression seemed to suggest. This is especially true for

Asian and African immigrants. For these two groups, the use of welfare post 1996 is similar to U.S.

born for immigrants who arrived before 1996 while an inclusion of all immigrants suggests a higher

23

Trends in welfare usage of non−U.S born

0.0

5.1

.15

.2m

ea

n o

f a

nyw

elfa

re

199495 96 97 98 99200001 02 03 04 05 06 072008

Trends in welfare usage among U.S born0

.05

.1.1

5.2

me

an

of a

nyw

elfa

re

199495 96 97 98 99200001 02 03 04 05 06 072008

Figure 1: Trends in Welfare Usage for Immigrants and U.S born

Note: The X axis shows the years and proportion using welfare is on Y axis.

24

probability of welfare usage in comparison to U.S. born post reform. For immigrants from Canada

and South America the results do not change from those in Table 5. Interestingly, U.S. protectorates

and immigrants from the Central America and Caribbeans are the only group with higher increase

in the probability of welfare usage for its immigrant arriving before 1996 in comparison to all its

immigrants, post reform. For immigrants from U.S. protectorates who are all eligible to use welfare,

this result may imply a change in types of immigrants from these territories post 1996 or a change

in the perception of welfare usage for more recent immigrant cohorts. However for immigrants

from Central America and Caribbean, this result is more likely a reflection of the large increase

in illegal immigrants from this region in the late 90s who are all not eligible for welfare programs.

Hence a higher increase in probability of welfare usage for pre 1996 immigrants from this region in

comparison to post 1996 immigrants from this region could simply reflects a decrease in eligibility

distribution among post 1999 immigrants from Central America and the Caribbeans.

The results in Table 7 provide support for our thesis that part of the noted increase in the

probability of welfare usage is solely driven by change in immigrant population post 1996. However,

the result in Table 7 shows that change in immigrant population is not the only factor that has

led to this increased probability in comparison to U.S. born. One possible explanation for the

increased probability among immigrants who arrived before 1996 could be that the welfare reform

and the media coverage that came with it provided ample information on welfare eligibility that

might not have been available among some immigrant communities before the reform. This increase

in information could lead to an increase in usage for those who were eligible prior to reform but were

not aware of it. Hence increased information as was available through the welfare program overhaul

could have led to an increase in usage for those eligible despite the decrease usage for immigrant

who were no longer eligible for welfare. The net effect from these two opposing forces could be an

increase probability of welfare usage for immigrant groups in comparison to U.S. born. It is also

possible that the introduction of welfare reform led to an increase in welfare usage among eligible

immigrants who did not use welfare previously just to help their relations and community of recent

immigrant who were no longer eligible to get welfare benefits because of the reform. Implying that

within immigrant communities, a form of transfer system could have emerged as a response to the

reform. Meaning those who are eligible and previously did not use welfare, now take advantage of

25

welfare only to support those who are not eligible within the community and need support which

they can no longer get from the government.

The finding highlighted in Tables (4)-(7) above could be downwards biased with respect to

revealing the true preference for welfare usage among immigrants. This is because though we have

a revealed preference for U.S. born Americans with regards to welfare usage, we do not have a

revealed preference for a good portion of immigrants. Immigrants who are not permanent residents

and U.S. citizens are not eligible for most government assistance. Even those who are permanent

residents are restricted in their access for a certain number of years post 1996. Hence, the fact that

the share of immigrants on welfare is dropping does not tell us anything about the true preference

of immigrants for welfare use.

One way to get around this problem and ensure that we get a sense of the true preference for

welfare usage for immigrants, is to compare U.S. born Americans to immigrants whose preference

are revealed. To implement this, we restrict the sample of immigrants to solely those who are

naturalized. In addition, decomposing the set of immigrants into those who are citizens and those

who are not will also help us in testing our third hypothesis. Our third hypothesis has three

separate parts. Each of these sub hypothesis are tested though our decomposition of immigrants

and estimating the probability of welfare usage for citizen immigrants in comparison to U.S. born.

These results are in column (1) Table 8 and 9. Subsequently, we focus on noncitizen immigrants,

comparing them with U.S. born. This result is summarized in column (2) of both Tables 8 and 9.

Table 8 captures the result using the nonrestricted welfare measure while Table 9 summarizes the

result using the restricted measure of welfare.

The results are again interesting and quite unexpected if only economic or demographic factors

are supposed to matter as predictors of welfare usage. We reject hypothesis 3a. We find that Natu-

ralized Americans on average have a lower probability of welfare usage than Noncitizen immigrants

and not a higher probability. Notice from Table 8 column (1) and (2) that all naturalized American

have equal or lower probability of welfare usage than U.S. born.3 In contrast, noncitizen immigrants

from Asia, Africa, Oceania, Central American and the Caribbean, Europe have a higher probability

of welfare usage than U.S. born immigrants while noncitizen immigrants from Canada and South

3We do not show immigrants from US protectorates in this analysis because they are neither naturalized or noncitizen immigrants. We already have shown that they use welfare at a much higher rate than U.S. born.

26

America have a similar probability of welfare usage as U.S. born.4 Interestingly, if we compare nat-

uralized immigrant solely among themselves, the results in Table 8 column (4) suggests differential

welfare usage among naturalized immigrant groups. In comparison to naturalized immigrants from

Europe, all other naturalized immigrant use welfare slightly more apart from those from Oceania

and Canada who have similar probability of welfare use as naturalized immigrants from Europe. For

noncitizen immigrants the results are slightly different. In comparison to noncitizen immigrants from

Europe, some nonimmigrant groups use welfare slightly more, while South America and Canada use

welfare slightly less. Only those from Oceania have similar probability of welfare use as noncitizen

immigrants from Europe.

The results from Table 9 using the restricted measure of welfare is slightly different from the

results using the unrestricted measure of welfare in Table 8. However it also leads to a rejection

of hypothesis 3a, naturalized Americans do not have a higher probability of being on welfare than

immigrant who are noncitizens. We also reject hypothesis 3b based on the results in Tables 9. The

use of standard welfare is not similar for all comparable noncitizens from different birth place and

similarly, the probability of welfare usage is not identical for naturalized immigrant groups.

The results in Table 8 and 9 suggests that naturalized immigrants do not use welfare more than

noncitizen immigrants, second welfare usage differ among both naturalized immigrants based on

birth place and also differs among noncitizen immigrants.

5.2 Robustness Check–Hypothesis 1

Returning to the first hypothesis on does birthplace continent matter for welfare usage, we can

retest this hypothesis focusing solely on those who are eligible for welfare usage. Recall in our

earlier test of this hypothesis we did not address the issue of eligibility. Rather we estimated the

likelihood of welfare usage for all immigrant birth place groups. However, given preferences are not

revealed for those who are ineligible for welfare and these immigrants are included in the sample of

all immigrants, then focusing solely on naturalized immigrants and citizens from U.S. protectorates

4The only group with higher probability of welfare usage is the group that consists of U.S. territories and naturalizedcitizens from Canada. However this higher welfare usage for this group is not driven by the naturalized immigrantsfrom Canada but by immigrants from U.S. territories. If we isolate the Canadians naturalized immigrants, we actuallyfind that naturalized Canadians have a similar probability of welfare as naturalized Americans from other group andU.S. born.

27

in comparison to U.S. born should be more appropriate for testing hypothesis one. Looking again

at table 8 and 9 column (1), which focus solely on naturalized immigrants and U.S. born leads to

new conclusions. First, given preference for welfare is revealed for naturalized citizens the results for

naturalized immigrants provides concrete evidence that immigrant birthplace matters for welfare

usage. Hence we still reject hypothesis 1b. With respect to hypothesis 1A we still reject the

hypothesis that immigrants and U.S. born have similar welfare usage. Recall that true preference

for welfare is revealed for three groups: U.S. born, U.S. protectorates citizens and naturalized

citizens, and though U.S. born and naturalized citizens on average share similar probabilities of

using welfare, immigrants from U.S. protectorates have a much higher welfare usage than U.S.

born.5 A possible issue that could cloud the validity of this results is self selection. It is possible

to argue that immigrants select to become naturalized citizens and the preference of naturalized for

welfare usage could be very different for noncitizen immigrants even if we could observe their true

welfare usage preference. Meaning that we cannot assume that comparable noncitzen immigrants

will use welfare similarly to naturalized immigrants if welfare restrictions are lifted. Similarly, we

cannot assume that providing citizenship for all noncitizen will lead to similar welfare usage for all

immigrants and citizens.

.

5.3 Other Results

Also we can conclude from this result that using the restricted measure of welfare could be mis-

leading. This implies that concentrating on the three main types of government assistance could

lead to a biased opinion on welfare usage across immigration groups in the U.S. Notice from Table

8 that is seems naturalized immigrants from Asia use welfare more than those who are U.S. born

and naturalized immigrants from Oceania seem to use welfare less. However, with the unrestricted

measure all three groups share similar probabilities. Similarly, naturalized immigrants from Ocea-

nia seems to have lower probability of welfare usage as naturalized immigrants from Europe but in

reality they have similar probability of welfare usage.

5Recall from Table 8 that for naturalized citizens, welfare usage is similar to U.S. born for naturalized immigrantsfrom all birth places apart from Canada for which the probability of welfare usage is slightly less than U.S. born.

28

Possible Explanation for results: Culture, Values and Institutionsor Self Selection

Our results has led to several unexpected findings. First, the fact that American citizens from U.S.

protectorates are more likely than any other group to use welfare is surprising. Second, finding

that comparable individuals from some immigrant group have different probability of welfare usage.

Third, we find that the probability of welfare usage increased post reform even for immigrants

arriving before the reform. Fourth, for some birthplace groups, we find higher probability of welfare

usage by noncitizen immigrants in comparison to naturalized Americans from the same group. These

unexpected results could be driven by several factors. We will highlight possible explanation for

these results, however we do not providing evidence for or against each of the potential explanation

because this is beyond the scope of our paper.

First, culture, values and individuals’ exposure to institutions are variables that economists

traditionally do not consider because of the difficulty in quantifying these variables. However, it

makes sense that a person’s culture, value or experiences may affect the way they view the use of

welfare or the individuals preference for or against governments help and assistance. We can view

individuals cultural view of welfare usage as the preference of a group for government assistance.

Given anecdotal evidence on different people groups perception on welfare usage in the U.S., it is

not impossible to imagine that preference for welfare may differ across countries. This difference

could be linked with institutional experiences or other factors. Second If we think of those who are

naturalized as a select group who choose U.S. citizenship because of their allegiance or respect for

the U.S. and their interest in serving or giving back or being totally part of this country, then these

individuals are more likely not to use welfare if they do not absolutely need it. This may explain

the lower welfare usage among naturalized immigrants for some birthplace groups in comparison to

noncitizen immigrants from those continents despite the existence of restrictions on welfare usage on

a portion of the latter (only permanent residents among noncitizen immigrants are eligible for some

government assistance), which should typically lead to lower welfare usage for noncitizens. Third,

it is possible that the increase in welfare usage post the reform, even among those who immigrated

before the reform, may be due to the fact that some of those who were not eligible before 1996 for

29

welfare, become eligible over time as they moved from visas to permanent residence status.6 Also

as highlighted previously, it may be that the whole media coverage of the welfare reform provided

a lot of information to groups who did not know much about welfare usage previously, which could

lead to higher welfare usage. In addition as highlighted earlier also, eligible immigrant might be

using welfare more post reform not for themselves but transferring benefits to other member of

their community (extended family) who are not or no longer eligible for welfare programs but need

assistance.

One argument against differences in culture and values in birthplace groups as it relates to

welfare usage is that if differences in welfare usage can be explained by an immigrants’ culture

and values, and if culture and values are similar among immigrants from the same birthplace, then

probability of welfare usage should be the same for naturalized and noncitizen immigrants from

the same birth place whose preferences are revealed. However, our results indicate otherwise and

suggests that either culture and value varies within countries/ birthplace groups, or other factors

like information and experience have a role to play. Information and experience can differ within

and between immigrant groups and can explain differences in probability of welfare usage for citizens

and noncitizen immigrants from the same immigrant group. Given the extremely high use of welfare

for citizens from U.S. protectorates in comparison to everyone else, it is possible that information

has a role to play. The role of information and networks on welfare usage has been documented in

the past. Immigrants from U.S. protectorates are U.S. citizens from birth and are more likely to

have more information than immigrants from anywhere else. However, their access to information

does not address the question of why they use welfare more than U.S. born Americans who should

have the same or more information. Hence though information may be important for welfare usage,

other factors still have a role to play in explaining our results.

6 Conclusion and Inferences

In this paper we try to answer three related questions by testing several simple hypotheses. First,

we create a simple model that indicates that if only demographic and economic factors matter, we

do not expect comparable individuals to use welfare at different rates. Hence, individuals birthplace

6 Also recall that the law only made restriction on welfare usage for new permanent resident immigrants and notfor permanent resident immigrants before 1996.

30

should not matter for welfare usage. This is the basis of the first hypothesis we test. Second we

argue that a change in policy that restricts welfare usage for non US citizens should lead to a decline

in the probability of welfare usage for all immigrants in comparison to U.S. born. In addition, ceteris

paribus, the decline in welfare usage for all immigrant groups should be similar as the reform did

not create differential restrictions on immigrants based on place of birth. These expectation led

to our second set of hypotheses. Our final hypothesis is based on the premise that naturalized

immigrants and U.S. born Americans are the only groups whose true preferences for welfare are

revealed post the 1996 reform. This is because the change in policy does not affect these groups.

However, for noncitizen immigrants, especially those who are on visa and illegal, the fact they are

not on welfare does not say anything about their preference or non-preference for welfare usage.

Hence, we expect that the probability of welfare usage would be higher for naturalized immigrants

compared to noncitizen immigrants simply because of the restriction on the latter.

Our results leads to the rejection of all our posed hypotheses. First our results show that though

many immigrant groups have identical probabilities of welfare as U.S. born, not all do. Hence, birth-

place matters for welfare usage in the U.S. In particular, our results suggest that immigrants from

U.S. protectorates use welfare more than any other group. Second, counter to what we expected,

our result suggest that despite a decline in the proportion of immigrants using welfare post welfare

reform in 1996, the probability of welfare usage increased for all groups post reform in comparison

to U.S. born. We show that this result is not driven solely by changes in immigrant population type

over the last 10 years and immigrants arriving pre reform also experienced an increase in probability

of welfare usage in comparison to the U.S. Our results also shows that this increase in probability of

welfare usage post 1996 differs across immigrant groups. Lastly, we also find that in contrast to what

we expect, naturalized immigrants on average use welfare less or equal to noncitizen immigrants.

What can we infer from these results or what do these results suggest? First, other non traditional

factors may be important for welfare usage. The culture, institutions and values people share may

shape their perception of welfare usage. In addition, peoples experiences and the information they

have may affect their likelihood of welfare usage. All these factors were not controlled for in our

probability model and could explain this unexpected result. Also the distribution of immigrant types

from each continent has changed significantly over the 90s. The inception of the visa lottery and

31

the increase in refugee immigrants from war torn countries in Africa and other parts of the world

can partly explain this change in the distribution. This change in the distribution may explain part

of the rise in probability of welfare usage post reform, although our results show that even among

immigrants arriving before reform, a rise in probability is noted. It is important to note that our

results do not suggest that welfare reform did not reduce welfare usage on average. Rather, we

try to find explanation for our unexpected result. The immigrant population in the U.S. may have

changed a lot over the last decade and if these new immigrants had different experiences or have

different culture, institutions and values because they come from different countries within these

continents, they may view welfare usage very differently.

In addition, the fact that naturalized immigrants from some continents use welfare less or the

same as noncitizens (given the restriction on this group) may suggest first a selection process into

being naturalized and may also suggest that this selection process may differ based on birthplace.

Meaning that people selecting to become naturalized citizens may have different values and per-

ception than other immigrants from the same continent, which may affect their decision not to use

welfare.

Our finding suggest the need for much more research on the decision to use welfare or not.

Clearly, other non traditional factors matter for welfare usage and being able to single out these

factors will be of importance with respect to suggesting policy that will attenuate unnecessary

welfare usage in the U.S. In future work, we hope to focus on immigrants from U.S. territories and

try to identify the role of information and other factors in explaining the high welfare usage of this

group in comparison to any other immigrant and citizen group.

32

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34

Table 3: Welfare Usage by Immigration Status and Birth Place

Birthplace Naturalized Non-naturalized U.S. born(1) (2) (3)

Africa Mean 0.074 0.15Stand. Dev. (0.26) (0.36)

N 2864 4355Central America Mean 0.14 0.15

& Caribbean Stand. Dev. (0.34) (0.36)N 35628 103928

Asia Mean 0.077 0.10Stand. Dev. (0.27) (0.30)

N 30521 31317Europe Mean 0.065 0.094

Stand. Dev. (0.25) (0.29)N 18113 15051

South America Mean 0.085 0.087Stand. Dev. (0.27) (0.28)

N 7066 12362Oceania Mean 0.071 0.14

Stand. Dev. (0.26) (0.35)N 464 877

Other Mean 0.1 0.17Stand. Dev. (0.3) (0.38)

N 3090 5098Other North Mean 0.063 0.052

America Stand. Dev. (0.24) (0.22)N 2627 3391

U.S. protectorates Mean 0.34Stand. Dev. (0.473)

N 16902Natives Mean 0.12

Stand. Dev. (0.32)N 1842647

Standard Dev. -Standard Deviation

35

Table 4: Does birth place matter for welfare usage?

Independent Unrestricted Welfare Measure Restricted Welfare MeasureVariables

anywelfare anywelfare welfstandard welfstandard(excludes U.S. born) (excludes U.S. born)

(1) (2) (3) (4)U.S. Protectorate 0.085* 0.14* 0.051* 0.079*

(0.01) (0.006) (0.007) (0.004)Other North America -0.005 -0.014* -0.01* -0.021*

(0.004) (0.004) (0.006) (0.002)C.A.C 0.008* 0.03* 0.004 0.014*

(0.004) (0.002) (0.003) (0.002)South America -0.002 -0.0003 -0.003 -0.008*

(0.004) (0.003) (0.002) (0.002)Europe 0.004 0.007*

(0.004) (0.003)Asia 0.018* 0.022* 0.012* 0.010*

(0.005) (0.002) (0.004) (0.002)Africa 0.023* 0.041* 0.008* 0.014*

(0.006) (0.005) (0.004) (0.004)Oceania 0.008 0.019* -0.010* -0.016*

(0.008) (0.01) (0.003) (0.004)Others 0.018* 0.036* 0.009* 0.017*

(0.006) (0.006) (0.004) (0.003)age -0.001* 0.000* 0.000* 0.000*

(0.00) (0.00) (0.00) (0.00)-41.780 6.140 -46.400 6.500

sex 0.006* -0.005* 0.004* -0.004*(0.0003) (0.001) (0.0002) (0.001)

famsize -0.005* -0.003* -0.001* 0.001*(0.0001) (0.0003) (0.000) (0.00)

children 0.027* 0.024* 0.017* 0.017*(0.000) (0.001) (0.000) (0.001)

def income 0.000 0.000 0.000 0.000(0.00) (0.00) (0.000) (0.00)

yrs in the U.S. no -0.0009* no -0.001*(0.000) (0.009)

State Dum yes yes yes yesYear Dum yes yes yes yes

Employment yes yes yes yesImmigrant cohort yes no yes no

Married Dum yes yes yes yesHealth Dum yes yes yes yes

Educ yes yes yes yes

Note: estimates are marginal impacts from probit estimationC.A.C- Central America and the Caribbeans* 5% significance levelDependent variable is welfare usage

36

Table 5: What was the effect of the reform on welfare usage across groups [Unrestricted WelfareMeasure]

Variables anywelfare anywelfare anywelfare anywelfare(excludes U.S. born) (excludes U.S. born)

(1) (2) (3) (4) (5) (6)

before reform postreform change before reform postreform change

U.S. Protectorates -0.068* 0.094* 0.162 0.239* 0.147* -0.092(0.001) (0.011) (0.024) (0.005)

Other North America -0.067* -0.008 0.067 -0.014 -0.017* -0.017(0.001) (0.004) (0.021) (0.004)

C.A.C -0.104* 0.009* 0.113 0.085* 0.034* -0.051(0.003) (0.005) (0.012) (0.002)

South America -0.068* -0.002 0.068 -0.004 -0.002 0.00(0.001) (0.004) (0.016) (0.003)

Europe -0.081* 0.004 0.081(0.002) (0.005)

Asia -0.080* 0.020* 0.100 0.067* 0.023* -0.044(0.002) (0.006) (0.015) (0.002)

Africa -0.065* 0.024* 0.089 0.043 0.042* 0.042(0.001) (0.007) (0.045) (0.005)

Oceania -0.064* 0.007 0.064 -0.090* 0.015 0.090(0.001) (0.008) (0.019) (0.01)

Others -0.070* 0.019* 0.089 0.034* 0.039* 0.005(0.001) (0.006) (0.018) (0.006)

Sex 0.003 0.006* -0.009 -0.005*(0.002) (0.00) (0.006) (0.001)

no child 0.043* 0.028* 0.041* 0.024*(0.001) (0.000) (0.003) (0.001)

years in USA no no yes yesState Dum yes yes yes yesYear Dum no yes no yes

Employment yes yes yes yesImmigrant cohort yes yes no no

Married Dum yes yes yes yesHealth Dum no no no noEduc Dum yes yes yes yes

Wages yes yes yes yesFamily size yes yes yes yes

age yes yes yes yes

Note: estimates are marginal impacts from probit estimationC.A.C- Central America and the Caribbeans* 5% significance. Note: Estimates that are not significant are treated as 0 in calculating the difference betweencolumns (1) and (2) and between (4) and (5) highlighted in column (3) and (6).

37

Table 6: What was the effect of the reform on welfare usage across groups ? [Restricted WelfareMeasure]

Independent ALL Difference Only Immigrants DifferenceVariable:

welfstandard welfstandard change welfstandard welfstandard change(excludes U.S. born) (excludes U.S. born)

(1) (2) (3) (4) (5) (6)

before reform postreform change before reform postreform change

US protectorates -0.041* 0.058* 0.099 0.159* 0.085* -0.074(0.001) (0.008) (0.021) (0.005)

Other North America -0.041* -0.012* 0.029 -0.039* -0.022* 0.017(0.001) (0.002) (0.021) (0.002)

C.A.C -0.066* 0.005 0.066 0.045* 0.016* -0.035(0.003) (0.003) (0.010) (0.002)

South America -0.042* -0.004 0.042 -0.011 -0.007* -0.007(0.001) (0.003) (0.012) (0.002)

Europe -0.050* 0.007* 0.057(0.002) (0.004)

Asia -0.050* 0.013* 0.063 0.038* 0.010* -0.028(0.002) (0.004) (0.012) (0.002)

Africa -0.040* 0.009* 0.049 -0.008 0.015* 0.015(0.001) (0.004) (0.035) (0.004)

Oceania -0.039* -0.012* 0.027 -0.077* -0.017* 0.061(0.001) (0.003) (0.007) (0.004)

Others -0.041* 0.010* 0.051 0.012 0.019* 0.019(0.001) (0.005) (0.014) (0.004)

sex 0.003* 0.004* -0.009 -0.004*(0.001) (0.0003) (0.005) (0.001)

no children 0.030* 0.018* 0.034* 0.017*(0.001) (0.0004) (0.003) (0.001)

Years in USA no no yes yesState Dum yes yes yes yesYear Dum no yes no yes

Employment yes yes yes yesImmigrant cohort yes yes no no

Married Dum yes yes yes yesHealth Dum no no no noEduc Dum yes yes yes yes

Wages yes yes yes yesFamily size yes yes yes yes

age yes yes yes yes

Note: estimates are marginal impacts from probit estimationC.A.C- Central America and the Caribbeans* 5% significance.

38

Table 7: Effect of the reform on welfare usage across groups for pre 1996 immigration cohorts?

Variable: ALL Difference Only Immigrants DifferenceIndependent anywelfare anywelfare anywelfare anywelfare

(excludes U.S. born) (excludes U.S. born)(1) (2) (3) (4) (5) (6)

before reform postreform change before reform postreform change

U.S. protectorates -0.068* 0.133* 0.201 0.239* 0.152* -0.087(0.001) (0.024) (0.024) (0.007)

Other North America -0.067* -0.017 0.067 -0.014 -0.01* -0.01(0.001) (0.009) (0.021) (0.004)

C.A.C -0.104* 0.031* 0.414 0.085* 0.04* -0.045(0.003) (0.0115) (0.012) (0.002)

South America -0.068* -0.001 0.068 -0.004 0.007* 0.007(0.001) (0.011) (0.016) (0.003)

Europe -0.081* -0.008 0.08(0.002) (0.010)

Asia -0.080* 0.017 0.08 0.067* 0.027* -0.04(0.002) (0.018) (0.015) (0.002)

Africa -0.065* 0.022 0.065 0.043 0.034* -0.009(0.001) (0.014) (0.045) (0.006)

Oceania -0.064* 0.064 -0.090* 0.009* 0.099(0.001) (0.008) (0.019) (0.012)

Others -0.070* 0.016* 0.089 0.034* 0.028* -0.06(0.001) (0.006) (0.018) (0.006)

Note: estimates are marginal impacts from probit estimationC.A.C- Central America and the Caribbeans* 5% significance. Note: Estimates that are not significant are treated as 0 in calculating the difference betweencolumns (1) and (2) and between (4) and (5) highlighted in column (3) and (6). controls identical to above regressions

39

Table 8: Does immigration status matter for welfare usage?

Variable: Any Welfare Any Welfare exc U.S. born

Naturalized Noncitizen Difference Naturalized Noncitizen Difference

(1) (2) (3) (4) (5) (6)

Other North America -0.005* -0.002 0.005 -0.004 -0.025* -0.025(0.006) (0.005) (0.004) (0.005)

C.A.C 0.012 0.008* 0.008 0.038* 0.022* -0.016*(0.007) (0.004) (0.003) (0.003)

South America 0.001 -0.002 0.00 0.012* -0.012* -0.024*(0.006) (0.004) (0.003) (0.004)

Europe -0.003 0.010* 0.010(0.005) (0.005)

Asia 0.013 0.022* 0.022* 0.022* 0.016* -0.006(0.007) (0.006) (0.003) (0.004)

Africa 0.004 0.033* 0.033* 0.023* 0.046* 0.023*(0.007) (0.008) (0.006) (0.008)

Oceania -0.008 0.019* 0.017* 0.006 0.019 0.00(0.008) (0.01) (0.012) (0.013)

Others -0.001 0.031* 0.031* 0.015* 0.048* 0.023*(0.007) (0.008) (0.006) (0.008)

Sex 0.007* 0.007* 0.000 -0.003* -0.004* -0.001(0.0003) (0.0004) (0.001) (0.002)

family size -0.005* -0.005* 0.001 -0.005* -0.001* 0.004(0.0002) (0.0001) (0.0005) (0.0005)

children 0.026* 0.027* 0.001 0.020* 0.031* 0.011(0.0004) (0.0003) (0.001) (0.001)

definc 0.000* 0.000* 0.000 0.000* 0.000* 0.000(0.00) (0.000) (0.00) (0.000)

Years in the USA no no yes yesYear Dum no no no noState Dum yes yes yes yesYear Dum no yes no yes

Employment yes yes yes yesImmigrant cohort yse yes no no

Married Dum yse yes yes yesHealth Dum no no no no

Educ yes yes yes yesAge yes yes yes yes

Note: estimates are marginal impacts from probit estimationC.A.C- Central America and the Caribbeans* 5% significance.Calculating the difference: note that estimates that are not significant are treated as 0 in finding the difference. * onthe difference column means difference is statistically significant.

40

Table 9: Does immigration status matter for welfare usage?

Variable: Standard Welfare Standard Welfare exc U.S. born

Naturalized Noncitizen Difference Naturalized Noncitizen Difference

(1) (2) (3) (4) (5) (6)

Other North America -0.008* -0.009* -0.001 -0.010* -0.031* -0.021(0.003) (0.002) (0.002) (0.004)

C.A.C 0.007 0.004 0.00 0.018* 0.006* -0.012*(0.005) (0.003) (0.002) (0.002)

South America 0.001 -0.003 0.00 0.003 -0.019* -0.019*(0.004) (0.002) (0.002) (0.002)

Europe 0.001 0.012* 0.011*(0.006) (0.004)

Asia 0.011* 0.013* 0.002 0.012* 0.001* -0.011*(0.006) (0.004) (0.002) (0.002)

Africa 0.001 0.013* 0.013* 0.009* 0.01* 0.001(0.005) (0.005) (0.004) (0.005)

Oceania -0.011* -0.008 0.011 -0.008 -0.023* -0.023*(0.004) (0.004) (0.005) (0.006)

Others -0.008 0.018* 0.018* 0.005 0.021* 0.021*(0.003) (0.005) (0.004) (0.006)

Sex 0.004* 0.004* 0.000 -0.002* -0.004* -0.002(0.0003) (0.0003) (0.001) (0.001)

famsize -0.002* -0.001* 0.000 -0.001* 0.002* 0.003(0.000) (0.000) (0.000) (0.000)

No child 0.016* 0.017* 0.001 0.011* 0.023* 0.011(0.000) (0.000) (0.001) (0.001)

def inc 0.000* 0.000* 0.000 0.000* 0.000* 0.000(0.00) (0.00) (0.000) (0.00)

Year in the USA no no yes yesYear Dum no no no noState Dum yes yes yes yes

Employment yes yes yes yesImmigrant cohort yes yes yes yes

Married Dum yes yes yes yesHealth Dum no no no no

Educ yes yes yes yesAge yes yes yes yes

Note: estimates are marginal impacts from probit estimationC.A.C- Central America and the Caribbeans * 5% significance.Calculating the difference: note that estimates that are not significant are treated as 0 in finding the difference.* on the difference column means difference is statistically significant.

41